Three opportunities for Canada in Durban

Environment Minister Peter Kent may relish another “fossil of the year” award for Canada at the UN climate negotiations in Durban, South Africa, starting Monday.

He seemed to be inviting one with his recent statement to the Toronto Economic Club: “However acute the international pressure, we will not agree to taking on a second commitment period target under the Kyoto Protocol.”

That earned the minister an undiplomatic rebuke from the high commissioner of South Africa, once again underlining Canada’s stature as the only country in the world to break its legal and moral obligations under Kyoto.

The opportunities for Kent to look good lie in the other major issue on the table at Durban: money to help poor countries already reeling from the changing climate. Given the conference takes place in Africa, where changes in temperature and precipitation have caused widespread crop failures, adaptation financing will be front and centre. And success on financing may help obscure failure to agree to ambitious emissions-reductions targets.

Last year, governments pledged to mobilize $100 billion per year by 2020 for a Green Climate Fund; the job in Durban is to determine how to finance and administer the fund.

A first step for Canada would be to make good on outstanding promises for “fast start” finance for 2010-2012. Canada came up with a fair share of $400 million for the first year, but we are now in the 11th month of 2011 with no sign of Canada’s second tranche. If Kent announces another $400 million, he should seek a better balance between adaptation and mitigation. (Last year, 89 per cent of Canada’s support went to help companies reduce emissions and only 11 per cent for adaptation.)

A second opportunity is to insist on structuring the Green Climate Fund so it works for the most vulnerable. Canada could reintroduce a measure raised last year to mandate fair representation for women, poor communities and developing country governments on the Fund’s board.

Those two should be easy. The third opportunity is where Canada could really shine: by supporting innovative ways to fill the Green Climate Fund, and thus lessen the burden on cash-strapped governments everywhere. Two mechanisms high on the Durban agenda are a tax on financial transactions and a levy on international shipping.

The financial transaction tax was championed by France and Germany at the G20, where a raft of international organizations and Bill Gates endorsed it, and Brazil, Argentina, South Africa, Ethiopia and Spain signed on. Even at the tiny proposed rate of 0.05 per cent, the tax would raise tens of billions annually. Applying it to the Toronto Stock Exchange alone would raise $400 million a year, equivalent to Canada’s current pledge.

The other innovative finance mechanism Kent may find attractive is putting a carbon price on international shipping. Shipping causes 3 per cent of global greenhouse gas emissions, more than Canada or Germany. Shipping emissions have doubled since 1990 and are projected to treble by 2050, yet are currently unregulated and untaxed.

Applying a $25 per ton carbon price on shipping fuel would give the industry a solid incentive to reduce emissions, while generating $25 billion per year by 2020. The shipping levy has been endorsed by France, Germany, South Africa, and key international organizations including the World Bank and the IMF (plus Gates).

Even the International Chamber of Shipping (representing 80 per cent of the merchant fleet) has come on side. And a proposal to use part of the revenues to reimburse developing countries for any resulting trade losses seems to have broken the negotiating logjam. Agreement in Durban is a real possibility.

Kent won’t want to oppose this one in Durban, especially since developed countries would earn a credit on their obligation to provide climate financing based on their share of global imports by sea. Canada’s credit could be up to $475 million per year.

Climate change is wreaking havoc in developing countries. As one of the top 10 polluters in the world, Canada has a special responsibility to make reparations. Even if Kent remains inexplicably stubborn on emissions reductions, he could champion climate finance and keep some egg off Canada’s face.